Following a story from the Washington Post that said Elon Musk’s $44 billion takeover attempt for the company is in “severe peril,” Twitter shares fell on Friday. According to the article, which seems to rely primarily on insider information from the camp of Tesla CEO Elon Musk, Musk is still of the opinion that Twitter is not being truthful about its estimations of spam or bogus accounts on the microblogging service.
Ken Paxton, the attorney general of Texas, backed him up as well. Last month, he opened a special investigation into the firm and has since reiterated Musk’s demand for additional evidence to back up charges of false accounts. While Twitter stated it stood by its past filings with the Securities and Exchange Commission, which estimate fewer than 5% of total accounts are spam or fraudulent, Musk, renounced his right to due diligence on the purchase when it was announced earlier this spring, has repeatedly claimed that Twitter is refusing to cooperate by withholding its estimations of bogus accounts.
According to statistics from audience-research software company SparkToro LLC, The Wall Street Journal estimated in June that as many as 70% of Musk’s over 100 million followers are spam, fraudulent, or inactive.
The Post said that Musk might take “drastic action” about the deal shortly, but highlighted that the challenges facing the Tesla CEO are further complicated by the legal entanglements and the $1 billion break-up fee associated with the planned purchase.
Musk threatened to cancel the merger deal if Twitter didn’t release the phony account data last month, citing a “clear significant violation” of the agreement. Musk has said that there is “some likelihood” that there are more false and bot accounts than “daily active users,” but he did not provide any evidence to support this claim. Early Friday trading on Twitter shares saw a 4.4 percent decline, with each share changing hands at $37.03, which is 31.5 percent below Musk’s “best and last” bid of $54.20 per share for the company.
Source: The Street